Gold Technical Price Outlook: XAU/USD Near-term Trade Levels
Gold prices are attempting to close a four-day advance with XAU/USD rallying alongside equities today. The recovery off downtrend support is now testing downtrend resistance- it’s make-or-break here near-term for the bulls. These are the updated targets and invalidation levels that matter on the XAU/USD technical charts. Review my latest Strategy Webinar for an in-depth breakdown of this gold technical setup and more.
Gold Price Chart – XAU/USD Daily
Technical Outlook: In my last Gold Price Outlook we noted that XAU/USD had, “rebounded off downtrend support and threatens a recovery within the broader decline.” Price has now rallied nearly 4.4% off those lows with the recovery exhausting into resistance today at 1849/53– a region defined by the 2021 high-week close and the 23.6% Fibonacci retracement of the March decline. Note that this zone converges on the median-line over the next few days and further highlights its technical significance- watch the close.
Gold Price Chart – XAU/USD 240min
Notes: A closer look at Gold price action shows the recovery probing resistance today with an embedded ascending channel giving some guidance to this advance. Initial support now at Friday’s low near 1832 with a break below 1818 needed to mark resumption of the broader downtrend towards 1791 and November lows / 78.6% retracement at 1758/61– look for a larger reaction in price there IF reached. A breach higher from here would keep the focus on the 38.2% retracement / May open at 1895/97 and the 2021 high-day close at 1918– both zones of interest for possible exhaustion IF reached.
Bottom line: The gold price recovery is probing confluent downtrend resistance here at 1849/53 – failure to close above this threshold could mark resumption of the broader downtrend. From a trading standpoint, a good zone to reduce long-exposure / raise protective stops- losses should be limited to 1818 IF price is heading higher on this stretch. For now- look for a break of the weekly opening-range for guidance. Review my latest Gold Weekly Price Outlook for a closer look at the longer-term XAU/USD technical trading levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Gold Trader Sentiment – XAU/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-long Gold- the ratio stands at +5.84 (85.37% of traders are long) – typically bearishreading
- Long positions are0.44% higher than yesterday and 19.17% higher from last week
- Short positions are12.94% higher than yesterday and 7.98% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Trader are less net-long than yesterday but more net-long from last week. The combination of current positioning and recent changes gives us a further mixed Gold trading bias from a sentiment standpoint.
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– Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex